Involvement of private actors in the provision of urban sanitation services; potential challenges and precautions

2015 ◽  
Vol 26 (2) ◽  
pp. 270-287 ◽  
Author(s):  
Emmanuel Yeboah-Assiamah
Keyword(s):  
Private Sector ◽  
Public Choice ◽  
Principal Agent ◽  
Policy Makers ◽  
Content Type ◽  
Agent Model ◽  
The Public ◽  
Sanitation Services ◽  
Urban Sanitation ◽  
Principal Agent Model

Purpose – The purpose of this paper is to use relevant models and theories to conceptualize the prospects and challenges associated with private sector involvement in the provision of sanitation and environmental services in urban settlements of developing African economies. Design/methodology/approach – The study adopts the public choice theory and principal-agent model in its conceptualization and analysis. Retrospective literature analysis within the qualitative research approach has been employed for the study. It draws extensively on existing classical theoretical and current empirical literature on privatization of urban sanitation services in developing countries. Findings – The study observes that privatization is a necessary tool for enhancing quality and responsive sanitation service delivery but there must be some mechanisms to prevent any latent challenges. The study also observes that the same problems associated with the public sector could transcend into the private sector if key measures are not taken into consideration. Practical implications – The process of privatizing or contracting out must ensure competition, enough communication to all stakeholders as well as involving expertise in the bidding process. The process also requires strict monitoring and supervision; these call for an appropriate legal framework to regulate privatization. The paper reminds urban administrators and policy makers to be circumspect in the privatization process. If the process of privatization is carried out effectively, urban sanitation services will be provided effectively and efficiently. Originality/value – The paper adapts the public choice and principal-agent model to assess privatization processes in developing African countries. This study will be of importance to urban administrators, public officials and policy makers in general.

Incentive strategy about technology innovation based on knowledge ecological coupling in strategic emerging industry

Kybernetes ◽  
2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yue Long ◽  
Lang Lu ◽  
Pan Liu
Keyword(s):  
Technology Innovation ◽  
Volterra Model ◽  
Principal Agent ◽  
Profit Model ◽  
Content Type ◽  
Agent Model ◽  
Coupling Relationship ◽  
Principal Agent Model ◽  
Low Efficiency ◽  
Innovation Chain

PurposeThe purpose of this paper is to solve the problem of low efficiency on knowledge resources allocation in the strategic emerging industry (SEI), an incentive model of technology innovation based on knowledge ecological coupling is designed.Design/methodology/approachFirst, a principal–agent model of knowledge inputs and a knowledge ecological coupling model based on an improved Lotka–Volterra model are constructed. In addition, a numerical example about Chongqing Yongchuan industrial park, the emulation analysis and the associated discussions are conducted to analyze the equilibriums of principal–agent in different knowledge inputs. Further, the paper analyzes the evolutionary equilibrium in knowledge ecological coupling and reveals the dual adjustments of the node organization on knowledge inputs.FindingsThus, this paper shows that by establishing the relationships of knowledge ecological coupling based on “mutualism and commensalism,” node organization raises the level of knowledge inputs; an incentive mode of “knowledge ecological coupling relationship + technology innovation chain” is conductive to substantially improving the efficiency of knowledge resource allocation, and to stimulate the vitality of node organization for technology innovation in the strategic emerging industry (SEI).Originality/valueThis paper contributes to the extant researches in two ways. First, this paper reveals the dual adjustments of the node organizations in inputting knowledge, which broadens the vision and borders of the researches on traditional knowledge management. The methods of the traditional principal–agent model and the knowledge input/output profit model are also expanded. Second, this paper verifies that applying the mode of “knowledge ecological coupling relationship + technology innovation chain” in practice is conducive to enhancing the efficiency of the cross-organizational knowledge allocation in the strategic emerging industry (SEI).

scholarly journals Principal-agent problems in publicly owned enterprises: The failure of the shareholder

2021 ◽  
Vol 10 (4) ◽  
pp. 70-83
Author(s):  
Njomëza Zejnullahu
Keyword(s):  
Private Sector ◽  
Rent Seeking ◽  
Principal Agent ◽  
Minority Shareholders ◽  
Best Interest ◽  
Principal Agent Theory ◽  
Agent Model ◽  
Principal Agent Model ◽  
Publicly Owned ◽  
The Government

The presence of principal-agent problems in publicly owned enterprises is highlighted by many scholars. Unfortunately, such problems are present in publicly owned enterprises (POEs) in Kosovo too. Capture, rent-seeking, moral hazard, information asymmetry, and adverse selection are some of the agency problems that POEs in Kosovo are facing, negatively impacting their performance and citizens’ welfare. Recently, one of the POEs that used to be the most profitable is on the verge of bankruptcy with bank accounts blocked. This paper aims to explore the relevance of principal-agent problems in the governance of publicly owned enterprises and the failure of the shareholder to play its role and pursue the best interest of POEs. The paper also questions the applicability of the principal-agent model in POEs when the shareholder fails to play its role as a principal by concluding that the lack of “real” principal in publicly owned enterprises undermines the applicability of principal-agent theory and there is a need to make the Government more responsible by taking some measures such as the inclusion of private sector as a shareholder. The paper concludes that the Government must act as a responsible shareholder and exercise its role properly while also raises the opportunity of the inclusion of the private sector as minority shareholders in POEs, which may help in increasing the responsibility of the shareholder in the oversight of the management of POEs. Conclusions of the paper may be relevant for further studies regarding the corporate governance and structure of publicly owned enterprises from the perspective of the agency theory and hence exploring possibilities of reducing principal-agent problems in POEs.

Double-sided moral hazard, information screening and the optimal contract

2016 ◽  
Vol 6 (4) ◽  
pp. 404-431 ◽  
Author(s):  
Jin Xue ◽  
Yiwen Fei
Keyword(s):  
Venture Capital ◽  
Moral Hazard ◽  
Capital Investment ◽  
Principal Agent ◽  
Optimal Contract ◽  
Fixed Income ◽  
Content Type ◽  
Agent Model ◽  
Venture Capital Investment ◽  
Principal Agent Model

Purpose In the practice of venture capital investment, the venture capital will not only claim the share of the enterprise’s future output, but also a certain amount of fixed income. The purpose of this paper is to examine the optimal contract which blends the variable ownership income and the fixed income theoretically so as to provide a keen insight into the venture capital practice. Design/methodology/approach This paper establishes an extended principal-agent model and researches on the design of optimal contract dominated by venture capital with double-sided moral hazard and information screening. Findings By establishing theoretical models, the main findings are: first, high-quality enterprise tends to relinquish less ownership but give more fixed return to the venture capital as compensation in order to obtain the venture capital financing; second, low-quality enterprise is willing to relinquish more ownership but give less fixed return to the venture capital for financing; third, due to the existence of double-sided moral hazard, neither of the venture capital and the enterprise will exert their best effort. Originality/value This paper furthers the application of principal-agent model in the field of venture capital investment and researches on the optimal contract, considering double-sided moral hazard and adverse selection at the same time originally.

Dynamic performance incentive model with supervision mechanism for PPP projects

2020 ◽  
Vol 27 (9) ◽  
pp. 2643-2659 ◽  
Author(s):  
Hong Zhang ◽  
Lu Yu ◽  
Wenyu Zhang
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Economic Benefit ◽  
Dynamic Performance ◽  
Principal Agent ◽  
Operation Performance ◽  
Content Type ◽  
Effort Level ◽  
The Public ◽  
Incentive Model

PurposeThis study is aimed to explore the dynamic performance incentive model for a flexible PPP contract to handle uncertainties based on supervision during the long-time concession period, so as to ensure operation performance and benefits of the public sector while protecting the economic benefit of the private sector, thus avoiding unnecessary renegotiation.Design/methodology/approachThe microeconomic and principal–agent theories and relevant studies on the basic incentive model and flexible contract are fully utilized. The procedure for developing the dynamic incentive model and the assumptions about the quantitative relationships among fundamental variables or factors are first proposed. The static incentive model without incentive parameter adjustment and then the dynamic incentive model allowing incentive parameter adjustment are successively developed. Finally, the propositions regarding the valid adjustment ranges of the incentive parameter with respect to the economic, social and hybrid benefits of the public sector and the economic benefit of the private sector are suggested.FindingsThe dynamic incentive model enables to achieve a flexible contract to handle uncertainties on the PPP project to ensure the benefits of the public sector while protecting the benefit of the private sector. The economic, social and hybrid benefits of the public sector and the economic benefit of the private sectors can be respectively realized through adjusting the reward–punishment coefficient under different adjustment ranges and different importance. The incentive model is able to ensure the benefits of the public sector while protecting the benefit of the private sector by controlling the private sector's effort level unknown to the public sector.Originality/valueThe dynamic incentive model helps implement a flexible PPP contract to handle uncertainties during the operation period, thus controlling the effort level of the private sector and ensuring the benefits of the public sector while protecting the economic benefit of the sector. It enables to clarify the quantitative relationships between the operation performance, the benefits of the stakeholders, the effort level of the private sector and the reward–punishment coefficient. This study contributes to the domain knowledge of the incomplete contract theory for designing a flexible PPP contract with dynamic incentive and supervision mechanism by applying the microeconomic and principal–agent theories.

Blockchain and contract theory: modeling smart contracts using insurance markets

2019 ◽  
Vol 46 (6) ◽  
pp. 803-814 ◽  
Author(s):  
Alpen Sheth ◽  
Hemang Subramanian
Keyword(s):  
Economic Model ◽  
Reference Model ◽  
Insurance Industry ◽  
Principal Agent ◽  
Smart Contracts ◽  
Content Type ◽  
Agent Model ◽  
Smart Contract ◽  
Economic Transformations ◽  
Principal Agent Model

Purpose The purpose of this paper is to model blockchain-based smart contracts specifically for the insurance industry. The authors introduce the concept of smart contracts and further discuss the implementation of a decentralized insurance marketplace, namely Etherisc, using smart contracts on the Ethereum blockchain platform. Design/methodology/approach The authors employ three methods in this paper. The first one is a design illustration of a live application, namely, Etherisc. The second one is an economic model using demand–supply and equilibrium economics. The third one is an illustration using principal–agent modeling using constrained optimization. Findings The findings illustrate the following: in the design discussion, the authors demonstrate the architecture of a live Ethereum-based smart contract system. In the economic model, the authors illustrate how decentralized smart contract systems can increase social welfare by shifting demand and supply by reducing transactional costs. In the principal–agent model, the authors show how both the principal and agent are positively benefited by various mechanisms. Originality/value The paper is an original contribution and can be used as a reference model to study insurance or other similar marketplaces and the underlying economic transformations happening therein.

Relationship between CSR motivations and corporate social performance: a study in the power industry in India

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Moumita Acharyya ◽  
Tanuja Agarwala
Keyword(s):  
Public Sector ◽  
Private Sector ◽  
Corporate Social Performance ◽  
Social Performance ◽  
Power Sector ◽  
Public And Private ◽  
Content Type ◽  
The Public ◽  
Self Interest ◽  
Public And Private Sector

PurposeThe paper aims to understand the different motivations / reasons for engaging in CSR initiatives by the organizations. In addition, the study also examines the relationship between CSR motivations and corporate social performance (CSP).Design/methodology/approachThe data were collected from two power sector organizations: one was a private sector firm and the other was a public sector firm. A comparative analysis of the variables with respect to private and public sector organizations was conducted. A questionnaire survey was administered among 370 employees working in the power sector, with 199 executives from public sector and 171 from private sector.Findings“Philanthropic” motivation emerged as the most dominant CSR motivation among both the public and private sector firms. The private sector firm was found to be significantly higher with respect to “philanthropic”, “enlightened self-interest” and “normative” CSR motivations when compared with the public sector firms. Findings suggest that public and private sector firms differed significantly on four CSR motivations, namely, “philanthropic”, “enlightened self-interest”, “normative” and “coercive”. The CSP score was significantly different among the two power sector firms of public and private sectors. The private sector firm had a higher CSP level than the public sector undertaking.Research limitations/implicationsFurther studies in the domain need to address differences in CSR motivations and CSP across other sectors to understand the role of industry characteristics in influencing social development targets of organizations. Research also needs to focus on demonstrating the relationship between CSP and financial performance of the firms. Further, the HR outcomes of CSR initiatives and measurement of CSP indicators, such as attracting and retaining talent, employee commitment and organizational climate factors, need to be assessed.Originality/valueThe social issues are now directly linked with the business model to ensure consistency and community development. The results reveal a need for “enlightened self-interest” which is the second dominant CSR motivation among the organizations. The study makes a novel contribution by determining that competitive and coercive motivations are not functional as part of organizational CSR strategy. CSR can never be forced as the very idea is to do social good. Eventually, the CSR approach demands a commitment from within. The organizations need to emphasize more voluntary engagement of employees and go beyond statutory requirements for realizing the true CSR benefits.

Why Were Workers Whipped? Pain in a Principal-Agent Model

1990 ◽  
Vol 100 (403) ◽  
pp. 1109 ◽  
Author(s):  
Michael Suk-Young Chwe
Keyword(s):  
Principal Agent ◽  
Agent Model ◽  
Principal Agent Model
Sign in / Sign up

Export Citation Format

Share Document